Created nearly 200 years ago (in 1818 per Benjamin Delessert with the Savings bank of Paris), the normal Livret account has became the most popular product for savings in France. An operation simple and government guaranteed. Interests Net of taxes. Savings accounts (Livret) are held by more than 50 million French residents and account for more than 140 billion euros (as at the end of 2007).

The characteristics of the new Livret A bank account in France

Fed up with only getting a couple of percent on your savings in France? The new Livret A account will be giving 4% from August and is expected to be returning 4.8% from January 2009!

A weakly minimum of payment: 15 € (only 1.5 € at the French Post Office Bank).

A ceiling of the deposits of 15,300 € excluding capitalization of the interest. For associations (and the non-profit-making moral persons), the ceiling is multiplied by five to 76,500 €. For social housing organizations (in particular organizations HLM), there is no ceiling.

The remuneration of the Livret bank account is 3.5 % per annum (3,5% since February 1, 2008, and 4% from August 1, 2008). Since 2004, the rate of remuneration is likely to be adjusted twice per annum.

The payments and the withdrawals are free, with a minimum amount of 15 euros (1.5 euros at the French Post Office Bank) per operation, subject to respecting the maximum balance.

The Livret bank account is distributed by the Postal bank (in the past La Poste), the Savings bank and Crédit Mutuel (under Blue Livret name). It is illegal for anyone to have more than one Livret bank account.

The Livret bank accounts in France can be opened for any person even a minor.

The interest on a Livret bank account is Nets of taxes and French national insurance contributions.

Calculation of the interests

The interest is calculated fortnightly.

To optimize the interest paid on your bank account in France, it is necessary to make any payments into the Livret bank account between the 15th of each month and the last day of the month. Any withdrawals should be made between the first of the month and the16th day of the month. You can make transactions at any other time, however your interest rate will be penalised.

At each end of the year, on December 31, the interest is calculated and added to the balance of your Livret A. At the time of this capitalization of the interest, the amount of the ceiling can be exceeded. If such is the case, no new payments can be made as long as the balance remains above the ceiling.

Ceiling of the Livret bank accounts

Evolution of the ceiling of the Booklet since the 1950's:

Date

Ceiling in francs

Ceiling in euros

July 1, 1952

45,000 F

6,860 €

November 1, 1980

49,000 F

7,470 €

April 2, 1983

58,000 F

8,842 €

June 15, 1984

68,000 F

10,367 €

May 31, 1986

72,000 F

10,976 €

June 30, 1987

80,000 F

12,196 €

May 1, 1990

90,000 F

13,720 €

October 30, 1991

100,000 F

15,245 €

January 1, 2002

100,360 F

15,300 €

Note: conversions of franks and euros are round for a simplification of the table.

A financing of the social housing

Livret A bank accounts are managed by the Case of the Deposits and Consignments (CDC). These funds are used to finance the social housing in France, and, by in particular of the loans at organizations HLM.

On the other hand of this collection of funds, the CDC remunerates the establishments by a commission: 1% for the Savings bank, 1,3% for the Postal bank and 1,1% for Crédit Mutuel.

The Livret as of from 2009

Following the request of the European commission in France, to put an end to the restrictions of distribution of the Livret bank account to only certain banks within nine month (request carried out on May 10, 2007), a modification of the distribution of the Livret bank account has been announced for 2009. This request made following the open infringement proceedings in June 2006 by the European commission.

The Livret will in future be distributed in all the banking networks, in France, from January 1, 2009. For private individuals, besides this new competition, it should not have any change. In particular, it will still not be authorized to have several Livret A bank accounts. The modification which takes shape is on the level of the centralization of the funds. Today, the Case of the Deposits centralizes the entirety of the fund. Next year, this centralization should be done only on half of the funds, the other half being preserved in each bank. The Postal bank would ensure, in addition, a banking obligation of accessibility and would allow the payments and the withdrawals in the post offices.

In conclusion, depending on which bank you are currently banking with in France. You should be able to have access to slightly better interest rates than have previously been available, thanks to competition brought on by the opening up of the French banking system. Some banks are already quoting interest rates of 4.8% as of August 2008, other banks will not be able to offer Livret A bank accounts until January 2009.